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Blog » Jobs and Structural Change Blog Series: by Dino Merotto

Jobs and Structural Change Blog Series: by Dino Merotto

Created Jun 01 2020, 4:53 PM by Teuta Gashi

Jobs and Structural Change Blog Series: by Dino Merotto

The initial motivations for this series were the IDA19 framework for Jobs and Economic Transformation (JET), and the findings of our Report “Pathways to Better Jobs in IDA Countries”.

 In the Jobs Group we want the operational response to the JET agenda  across countries to take account of empirics from country jobs diagnostics  and global jobs measurement. We want priority operations and scaled up  jobs lending to prioritize solutions that take account of the economics of  growth and structural change. Specifically, we want theses blogs and a publication which will follow them, to offer:

  1. Global evidence of how patterns of work change as countries transform and get richer;
  2. Insights into how the Jobs challenges that countries face evolve with their development; and
  3. How the characteristics of a country (youthful, resource rich, labor abundant, open and closed, large and small populations) affect the jobs challenges it faces;
  4. Evidence of how country conditions (pace of transformation, pace of investment and growth, fragility) alter the priority jobs challenges in a country;
  5. Insights into how different worker groups (youth, women, rural, unskilled) have different work profiles and face different jobs challenges differ at different stages of development;
  6. Reminders of what economic theories around growth and structural change mean for jobs diagnostics, country measurement around JET, and for solutions for jobs lending at scale;
  7. Suggestions for what countries can do to create better jobs for more people with economic transformation.

 

Our findings re-affirm earlier empirical literature of structural change from around the 1940s through the 1970s, which was closely tied to economic theories of growth and development. Colin Clark (1940), Simon Kuznets (1963), Moshe Syrquin and Hollis Chenery (1975), each noted how patterns of consumption, production and employment change as countries get richer.  These early works stressed the importance to structural change of demand (changing patterns of consumption and net trade), of capital and labor endowments, demographics, technology and related to it, openness to trade and capital. They underscored the importance of manufacturing to the process of structural transformation.

Structural change is back in vogue, and academics are re-investigating the drivers of observed patterns across countries and in countries over time, with important implications for strategies for Jobs and Economic Transformation. Diao, McMillan, & Rodrik (2017) look at differences in regional drivers of structural change in East Asia, Latin America and Africa. Comin, Lashkari, & Mestieri, 2018 model sectoral income elasticities, capital intensities and rates of technological progress, concluding that changes in income and consumption patterns account for 80 percent of changes in structural change. On the supply side, some authors following Rodrik (2015) such as Newfarmer, Page and Tarp (2018) have identify tradeable services as possible alternatives to offset “premature de-industrialization”, whereas Haraguchi, Cheng, & Smeets, 2017 re-emphasize the importance of manufacturing, noting that the observed patterns of premature deindustrialization are due not to changes in specific factors in manufacturing, but to the concentration of global manufacturing activities in specific countries.

With a view to supporting an evidence base for country jobs strategies, our blog series will continue to review the empirics of jobs and structural change.

Stay tuned!